Organised by the Yangon Region Investment Committee (YRIC) and the Directorate of Investment and Company Administration (DICA), YIF 2018 was designed to showcase Yangon as a leading investment destination in Asia.

Yangon Region chief minister Phyo Min Thein, told reporters that he was delighted with the response, saying, “Yangon is the economic epicentre of Myanmar and the potential for growth is tremendous. What some might consider challenges, we see as opportunities.”

Participants at the event included business leaders from Myanmar enterprises as well delegates from around Asia, North America, Europe and the Middle East. Asian investors made up more 80 per cent of the international delegates led by China (27 per cent), Singapore (11 per cent), Thailand (11 per cent), South Korea (6 per cent) and India (5 per cent).

The chief minister unveiled priorities in industry, trade & logistics, transportation and sustainable urban development. Major projects open for investment include a deep-sea port, an integrated logistics zone, a new special economic zone, and the New Yangon City Project.

He also highlighted investment opportunities in the areas of public transportation, including the development of inland water transport jetties, further improvements to the public bus and railway infrastructure, and the building of a central urban traffic management system to ease road congestion. Fresh investments in power and energy with a focus on renewables are also regarded as a priority.

“Building a smart, sustainable Yangon is part of our vision. We are committed to promoting a green economy and encourage those who want to seize investment opportunities in Yangon to forge partnerships that will lead us towards responsible and inclusive growth,” the chief minister said.

From the 1988-1989 to 2016-2017 fiscal years, 64,517 businesses were registered in Myanmar, 69 per cent of then in Yangon, according to the Myanmar Investment Commission. Over the same period, 845 foreign investment enterprises were established with a total of US$20.28 billion in investment, while and from FY 1994-1995 to 2017-2018, 585 Myanmar enterprises were set up involving kyat 6990.22 billion in investment.

Home to seven million people, Yangon is a booming consumer market with the population expected to increase to 10 million by 2030. As a manufacturing hub, it accounts for 73 per cent of the country’s total manufacturing investments. Yangon is the headquarters of major companies, as well as banks and financial institutions, and its ports handle 90 per cent of the country’s total imports and exports.

Urbanisation and increasing mobile usage are driving the appetite for digital payments across Asia Pacific. Half of the region’s population lives in towns and cities, and more than two thirds (1.3 billion) of the 1.9 billion internet users in Asia Pacific access the internet via their smartphones.

Asia Pacific is an US$11 trillion market in terms of payment volume. Currently, more than half (55 per cent), of all transactions are still cash, meaning there is a US$6.1 trillion cash opportunity waiting to be converted into digital payments.

While new innovations are set to enhance the payments experience for consumers, security and maintaining the integrity of the payments system is key to growing commerce. The fast-changing payments ecosystem will require security measures that do not come at a cost of convenience for both customers and merchants.

Joe Cunningham, head of Risk Asia Pacific Visa, said: “Payments security and convenience were once considered opposing forces. Not anymore. We have reached a point where security is embedded in the process. It doesn’t come at the cost of convenience but, rather, it enables innovation.

“Visa is committed to ensuring our network operates at the highest level of security available and will continue to steer the industry towards the adoption of strong technologies based on industry-standards such as EMV chip, tokenization and point-to-point encryption.”

Closer to home in Thailand, around 75 per cent of all transactions are still cash. However, the increased adoption of mobile and contactless payments technology will see electronic payments continue to penetrate into everyday payment segments like supermarkets, coffee shops, and cinemas, reducing the reliance on cash.

Visa also reinforced the importance of taking a standards-based approach to innovation and applying a consistent set of principles for security, reliability and interoperability.

“Visa advocates a standards-based approach to new innovations so all stakeholders in the ecosystem can benefit and participate. We want to promote standards that make it easier for all parties in the payments ecosystem to adopt and deploy new technologies that meet the highest security standards,” added Cunningham.

Thant Sin Lwin, deputy director general at the Directorate of Investment and Company Administration (DICA), said at a press conference on Tuesday that Myanmar Investment Commission (MIC) has been keeping an eye on the latest developments in the investment scenario to decide which sector should be liberalised first.

“We are trying to catch up with our neighbours. We may liberalise the insurance sector in our next move, as many insurance companies have visited us to discuss about expansion of their services and products in Myanmar,” he said. “But honestly, we have not decided anything yet, though insurance is a sector with high potential for liberalisation. We also need to take China’s Belt and Road initiative into serious consideration.”

According to the statistics, 24 foreign insurance companies has established their representative offices in Myanmar while 12 private local firms and state-owned Myanma Insurance Enterprise are offering a range of products to customers.

According to Thant Sin Lwin, investment bosses receive insurance companies that are willing to do business in Myanmar very often. Last week, senior executives at China Export & Credit Insurance Corporation visited Aung Naing Oo, secretary of MIC and director general at DICA, in Yangon to discuss about their investment plans.

He seems pretty satisfied with the outcome of liberalising the education sector. Many multinational players have visited the DICA office to discuss about their potential investments in the establishment of private international schools in Myanmar, he said.

“Some of them already prepared to submit their investment proposals to MIC. But the investors are also required to seek the education ministry’s approval, as it will serve as the regulator. Simultaneously, they are also in active discussions with the ministry,” he said.

The official said some international schools already present in Yangon have also contacted the commission to ensure getting involved in the liberalisation process and thereby largely benefit from that. Among them is the Myanmar International School, formerly known as the Diplomatic School, which has been operating in Yangon for six decades.

In the last MIC meeting on May 12, Myanmar approved four new foreign enterprises and 10 local companies to do business in manufacturing, services, agriculture, real estate, energy, and hotels and tourism. The approval would create nearly 12,000 new jobs for locals, said the official.

At the meeting, the commission approved the investment proposal by Singapore’s Coffee Concepts (Myanmar) Limited that will officially bring the Starbucks brand to the country.

“In their investment proposal, they have planned to open more than 20 Starbucks shops across the country. But they have yet to describe their business details, for example, when and where these branches will be opened,” he said.

The official said the firm had committed to invest US$6 billion after their preparation period of nine months. Marlar Myo Nyunt, another deputy director general at DICA, said Myanmar would attract more foreign investors through investment fairs to be held nationwide.

With the support of Japan International Cooperation Agency, the DICA has been organising several investment fairs in big cities since its very first event in Mandalay in September 2015. Last year, similar events were held in Taunggyi of Shan State and Hpa-an of Kayin State.

“We are planning to hold another investment fair in Ayeyarwady Region, perhaps in November when the rainy season ends,” she said.

After the success of Yangon Investment Forum last week, Kayah State will hold a similar event on May 26. There, three sectors namely agriculture, mining, hotels and tourism would be prioritised to attract new investors.

“The state government of Kayah is really eager to invite local and foreign businesses to invest in the region. They are more than willing to showcase their strengths and incentives to global players next week,” she said.

US-based Accenture is a global professional services company that provides services covering the realms of strategy, consulting, digital, technology and operations.

At a press conference on the first anniversary of the Accenture Customer Information Network in Milan on Tuesday, Pozzi said that the retail industry must overhaul the traditional business model by enhancing customer engagement through the personalisation of services. This could be achieved by promoting an exchange of customer data both outside and in-store for a better shopping experience. Pozzi cited the use of social media and applications that can help retailers meet the different demands of diverse customers.

“The retail industry in this era cannot offer merely a shopping mall or supermarket,” he said. “It has to combine more lifestyle activities to serve the different demands of different customers. It has to have an entertainment space and also provide a seamless convergence of the physical and digital experiences together with assortment optimisation and high-quality fresh and healthy food products to serve the demands of customers.”

Pozzi said that nowadays advances in technology are disrupting all types of industries, including retail. As a result, players in the retail industry must redesign their businesses through a collaboration between the retailers and the brands that creates the best consumer experience. Such collaboration must also strike a balance between the inputs of labour and technology. The key, Pozzi said, is to serve people faster with what they want, when they want it and where they want it.

In line with this trend, Accenture has worked with Italy’s largest supermarket operator, Coop Italia, to reinvent the customer experience in the grocery segment with the opening of its Supermarket of the Future store in Milan this year.

Pozzi said that the company worked with Coop to incorporate technology into the design of the supermarket. He highlighted the store’s favourable location, near a university as well as a gym and a cinema complex in a neighbourhood with a youthful population receptive to new trends. Aside from food, the supermarket also features a restaurant under the operator’s own brand, which Pozzi said was doing well. Instead of a more traditional meat-based delicatessen, the store offers a more modern format with organic produce and items aimed at attracting a younger, more health-conscious clientele.

Pozzi said the supermarket operator would continue to invest in new technology, particularly via mobile. A key feature of the store is its floor layout. Based on research done with a university, the shelf heights are lower than typically seen in other stores, drawing on customer preferences to emerge from the research.

Within the store are scanning devices that can detect body movement when a customer points to a product. With this gesture, the technology can reveal information about that particular product, along with story-type presentations on its origins. Customers also can scan the products to see information such as current promotions, nutritional facts and suggestions for similar products.

Andrea Colombo, vice president of Coop Lombardia, which is the regional entity for the cooperative network, said that after the opening of the redesigned branch in April, the customer traffic has been rising, boosting sales by up to 2 per cent. The store is faring better than the industry overall, which has logged negative growth of 2.07 per cent.

“Our customers enjoy shopping at the store and we have seen more activity and an increase in their spending in the shop,” Colombo said. “Also, the workers have more energy and are enthusiastic about the technology used, making them more inspired to offer better service to the customers.”

Colombo said the technology used in the store can also support the business logistics and supply chain sides of the operation. This boosts operational efficiency, he said. The store chosen for the technology infusion in Milan stocks 4,000 items, Colombo said.

A law governing cryptocurrency transactions came into force on Monday, drawing criticism that it would prove an obstacle to technology startups that want to raise funds with the cheaper costs from initial coin offerings (ICO).

Saroch Thongpracum, the department’s director of legal affairs, said yesterday that it would issue a regulation waiving the 7 per cent VAT for individual investors to reduce their tax burden.

Cryptocurrency transactions are currently subject to income tax for both private companies and individual investors.

Individuals will still have to pay a 15 per cent capital gains tax, also known as a withholding tax, on income earned in a transaction, Saroch told a press conference.

He said the department would later revise tax regulations for private firms trading in cryptocurrencies.

In response to complaints that the tax policy was biased against the digital assets, Soroch said that the Revenue department considers cryptocurrency and digital tokens as intangible assets, so earnings derived from digital asset transactions will be subject to tax.

Under the new law, private companies launching ICOs have to pay corporate income tax on the funds they raise from the exercise. In contrast, private companies that issue initial public offerings of their shares are not subject to income tax.

The SEC is expected to issue regulations next month related to capital raisings via initial coin offerings. SEC secretary general Rapee Sucharitakul said a public hearing on the new rules and regulations will be held on Monday. The consultation would take about two weeks, before the SEC issues the detailed regulations in June.

The new regulation aims to provide protection for general investors since only investors who have knowledge of ICO issuance or digital-asset transactions should be allowed to engaging in this kind of trading, Rapee said.

The digital asset law authorises the SEC to regulate transactions involving cryptocurrencies and digital tokens.

Three groups of operators – ICO portals, brokers and traders – must obtain licences from the Finance Minister, said Kulaya Tantitemit, a Finance Ministry spokeswoman.

Investors have to trade or deposit their cryptrocurrencies with those who obtains the relevant licences from the SEC, she added.

A new law governing cryptocurrency transactions came into force yesterday (May 14).

Saroch Thongpracum, the department’s director of legal affairs, said on Tuesday it would issue a regulation waiving the 7-per cent VAT for individual investors to reduce their tax burden.

Cryptocurrency transactions are currently subject to income tax for both private companies and individual investors.

Individuals will still have to pay a 15-per-cent capital gains tax, also known as a withholding tax, on income earned in a transaction.

Saroch said the department would later revise tax regulations for private firms trading in cryptocurrencies.

The SEC is meanwhile expected to issue regulations next month related to raising capital via initial coin offerings.

At the TDRI’s annual conference, Somkiat said disruptive technologies could prevent the economy from growing at an average of 5 per cent a year over the next 20 years, as targeted by the government.

Under this scenario the job losses would be massive, he said, noting the damage already done to Thailand’s print and television media operators by radical changes in technology. Somkiat predicted that, if Thailand cannot adapt, the economy would grow by only 2.1 per cent annually and three million jobs would disappear.

The government, aware of the risks of the country being left behind, has initiated the Thailand 4.0 policy to promote the digital economy.

However, Somkiat said that the government may not meet its own target for steering the country to achieve high-income status in the next 20 years.

He projected that the government will achieve only 25 per cent of its target in developing the farm and service sectors and 50 per cent of the target for the industrial sector. The government may attract some private investment, but not much. “We make an assessment that under the Thailand 4.0 scenario, the Thai economy will expand at 3.1 per cent and this would result in a loss of 1.5 million jobs,” said Somkiat. This is because the country faces shortages of skilled labour and the policies aimed at addressing this problem are not well coordinated.

The government does not have a policy for exploiting the benefits of artificial intelligence (AI) in industry, an essential element for the digital economy, Somkiat said.

Many countries such as China, Japan, Singapore, South Korea and the United States have articulated AI policies and they invest heavily in research and development related to AI.

He predicted that many jobs would be replaced by AI as its uses make inroads into the economy.

He urged the government to do more in order to advance the economy. Somkiat has proposed the so-called 3 C model: craft economy, creative economy and care economy.

This add-on to Thailand 4.0 would drive economic growth to 4.3 per cent, enabling Thailand to become a high-income country in the next 20 years. This would also narrow the income gap between the rich and the poor, Somkiat added.

According to TDRI researchers, many careers will be significantly affected, including those in the textile industry and other manufacturing operations, and the pressures would also be felt among cashiers, accountants and lawyers.

Elsewhere in the economy, some 80 per cent of value-added local media will be lost to giant foreign competitors, such as Facebook and Google, in the next 20 years. More than 20 per cent of the value-added financial sector will be lost to foreign rivals and 20 per cent of the value-added manufacturing sector will be drained away to foreign competitors.

NEW TAX measures aimed at curbing the Thai initial coin offering (ICO) market will adversely affect the economy as the measures could drive investors and entrepreneurs overseas, according to experts.

The Royal Gazette this week announced a new set of laws related to digital asset businesses, an amendment of the Revenue Code to regulate and impose high taxes on transactions. It also warned of tough punishments over illegal conduct in the digital economy.

The digital asset law authorises the Securities and Exchange Commission (SEC) to regulate transactions involving cryptocurrencies and digital tokens.

SEC secretary general Rapee Sucharitakul said yesterday that the new taxes and legal requirements would protect local investors who were assumed to have specialised knowledge on ICOs.

ICOs were for niche investors, not general investors who could be financially damaged if not well informed, he said.

The SEC is preparing to issue new ICO regulations based on the new digital assets law within the next 2-3 weeks.

It is empowered to regulate all digital assets but Rapee said that utility tokens might be exempt from the SEC requirements.

However, all exchanges that trade digital assets must be registered with the SEC within 90 days after new regulations are effective. Even ICOs launched prior to the new rules are required to seek approval.

The authority is hoping the new regulations will both promote the new sector as well as protect investors from fraud and cheating, he said, adding that the SEC and Revenue Department would hold a joint press conference today to clarify all issues.

The authority would also give the public a full month to submit opinions so that it would be best placed to handle the cryptocurrency sector in a practical way, he said.

However, Duenden Nikomborirak, of the Thailand Development Research Institute (TDRI), said the tax measures were not favourable for the Thai digital economy and tech start-ups.

Overall, the policy would drive Thai entrepreneurs and investors to Singapore, where there are no taxes on ICOs, she said.

Thai ICOs are now subject three taxes – 15 per cent capital gains tax, 7 per cent VAT and another 20 per cent corporate income tax – so there is no chance for Thai start-ups to grow to be “Unicorn” or a start-up worth US$1 billion or more, said Duenden.

Therefore she called on the government to review the tax measures to take into account all the risks and rewards.

According to the new amendment, revenue and capital gains from cryptocurrency and digital token transactions must be taxed.

Prinn Panitchpakdi, managing director of CLSA Securities (Thailand), also said that the Finance Ministry’s tax measures would likely kill the Thai ICO market even before it had a chance to become established.

This would prompt Thai firms to launch ICOs in other countries and deprive the country of new funding opportunities, he warned.

Other sources said the tax measures would lead to an outflow of investor funds from Thailand, while the country’s security exchanges would not be able to compete with those in other countries.

They said that not only would VAT and income tax hit investors and issuers but they appeared to be redundant measures. Critics also feared the policy would negatively affect the digital economy and innovation.

However, Pawoot Pongvitayapanu, chief executive officer and founder of Tarad.com, said the new law made several issues clearer and would help prevent money-laundering and other illegal activities.

Teerachart Kortrakul, an investor and founder of StockRadars, said many Thai investors were already trading cryptocurrencies abroad so they would not be affected.