Best Project Finance Lawyers in Myanmar

About Project Finance Law in Myanmar

Project finance refers to the financing of long-term infrastructure and industrial projects based on the projected cash flows of the project rather than the balance sheets of the project sponsors. In Myanmar, project finance is especially relevant for sectors such as power generation, transportation, telecommunications, agriculture, and real estate development. Given the country’s recent focus on economic development and openness to foreign investment, project finance structures are becoming an increasingly important tool for both local and international investors. Typically, these arrangements involve complex contractual structures, multiple stakeholders, cross-border elements, and coordination with governmental authorities.

Why You May Need a Lawyer

Project finance transactions in Myanmar are highly complex and often involve different legal and regulatory frameworks. You may require legal help in situations where you are negotiating large-scale infrastructure projects, dealing with cross-border transactions, acquiring or selling project assets, or facing disputes about project performance or financing arrangements. Lawyers can assist in drafting and reviewing project documents, negotiating contract terms, conducting due diligence, ensuring regulatory compliance, structuring financing, dealing with government agencies, navigating Myanmar’s foreign investment laws, and managing risks related to currency controls and land rights. Expert legal guidance can help mitigate risks, safeguard your interests, and ensure the success of your project.

Local Laws Overview

Myanmar’s project finance landscape is shaped by a number of key laws and regulatory frameworks. Some of the most relevant are:

- Myanmar Investment Law (2016) and Myanmar Investment Rules (2017): These govern foreign investment, set out investment incentives, and outline restrictions for certain sectors. - Companies Law of 2017: Provides the regulatory framework for establishing and operating companies in Myanmar. - Foreign Exchange Management Law and Regulations: Regulate foreign currency transactions and repatriation of profits. - Concession Agreements and BOT Structures: Many project finance deals in infrastructure involve Build-Operate-Transfer (BOT) and similar agreements with the government. - Land Laws: Legal frameworks related to land use, leases, and ownership are key, as foreign entities cannot directly own land in Myanmar. - Environmental Regulations: Certain projects require compliance with Environmental Conservation Law and obtaining Environmental Compliance Certificates. - Tax Laws: Including those related to tax holidays, capital gains taxes, and withholding taxes.

Careful attention to these localized requirements is crucial to the success and legal soundness of any project finance venture in Myanmar.

Frequently Asked Questions

What is project finance, and how does it work in Myanmar?

Project finance is a method of funding large projects where the lenders rely on the project's cash flow for repayment. In Myanmar, these structures are typically used for infrastructure and industrial projects, often involving government participation or oversight.

Are there restrictions on foreign investment in project finance?

Yes. Certain sectors are restricted or require joint ventures with local partners under the Myanmar Investment Law. Approval from the Myanmar Investment Commission is required for many large-scale or sensitive projects.

Can foreign investors own land for project finance projects?

Foreigners and foreign-owned companies cannot own land outright in Myanmar but can enter into long-term lease arrangements, usually for up to 50 years with possible extensions, subject to approval.

How do I get regulatory approval for my project?

Most significant projects require approvals from relevant Ministries, the Myanmar Investment Commission, and sometimes Environmental and other sectoral regulators. Legal counsel can help coordinate these processes.

What types of security can be provided to lenders?

Lenders in Myanmar often seek security interests in project assets, receivables, shares, insurance proceeds, and leasehold interests. Security arrangements must comply with Myanmar law and may require registration.

What are the common contractual structures for project finance?

Typical contractual arrangements include concession agreements, BOT contracts, EPC (engineering, procurement, and construction) contracts, operation and maintenance agreements, and various financing and security documents.

Are there specific tax incentives for project finance projects?

The Myanmar Investment Law provides various tax incentives, such as income tax exemptions for a number of years, customs duty exemptions on imported capital goods, and the ability to deduct certain expenses from taxable income.

What happens if the project fails to generate expected revenue?

If a project underperforms, lenders and investors may face losses. The recourse typically depends on the project's contractual arrangements and whether any guarantees or insurance are in place. Legal remedies and restructuring may be possible.

How can risks such as currency controls and repatriation of profits be managed?

Laws regulate currency conversion and profit repatriation. Thorough legal and financial planning, compliance with the Central Bank’s rules, and incorporating necessary protections in project documents are essential.

What dispute resolution methods are available?

Dispute resolution can involve Myanmar courts or, if provided in contracts, arbitration either locally or in international forums like Singapore. Parties often prefer arbitration for its enforceability and neutrality.

Additional Resources

If you seek further guidance or need assistance with project finance matters, consider consulting the following resources and organizations:

- Myanmar Investment Commission (MIC) - Directorate of Investment and Company Administration (DICA) - Ministry of Planning and Finance - Ministry of Commerce - Ministry of Construction (for infrastructure projects) - Myanmar Banks Association (for project finance banks) - Myanmar Centre for Responsible Business (for environmental and social guidance) - Local chambers of commerce and industry associations - International law firms or Myanmar-based legal firms with experience in project finance

Next Steps

If you are considering a project finance venture or encountering legal complexities in Myanmar, start by identifying the potential risks and the scope of your project. Collect all relevant documentation and clarify your objectives. Consider conducting a preliminary consultation with a lawyer experienced in Myanmar project finance. This professional can help assess your specific legal and regulatory requirements, suggest practical solutions, and represent you in negotiations or proceedings. Early legal support can enable smoother project execution, compliance with all legal requirements, and safeguard your investment. Remember to seek out local expertise, as Myanmar’s laws are unique and may be subject to rapid changes and regulatory updates.